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Shopkeepers call on government to think again over business rates

Some of Britain's biggest shopkeepers have been lobbying the Treasury to re-think its plan to raise business rates by 5.6pc.

Many of the high street's biggest names including Sainsbury's, B&Q, TopShop and Argos have called on George Osborne to consider revising the increase in rates that shops have to pay local authorities. Under current plans, the increase would hit shops with an extra £350m bill, at a time when many are tackling falling sales and rising rents.

This week Sir Philip Green warned that he could be forced to close 260 shops because of rising costs.

The increase in business rates, paid by all non-domestic properties, are calculated based on the previous September's Retail Prices Index. In September this year RPI hit 5.6pc, which would mean rates increase by this percentage from April next year.

The British Retail Consortium, which is leading the lobbying, pointed out that the country's shops represented 5pc of the nation's GDP, but paid 28pc of the business rates. Retailers' biggest costs are their property costs and wages.

A spokesman for Kingfisher, the parent company of B&Q, said: "Retail is one of the few sectors creating jobs in the UK at the moment, with our B&Q and Screwfix businesses set to create over new 1,000 jobs. It doesn't seem right to be penalised with such an onerous tax increase just because RPI was unnaturally high in September and is projected to fall back sharply in the next six months. We will have a permanent hike caused by a short-term spike."

Source: Harry Wallop Retail Editor - The Telegraph

26 November 2011
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